$10 Million Shave Club: Discount Razor Service Is a Hit With Investors

Take a high-end drugstore razor, remove any name branding, drop the price down to far less than Gillette’s and you’ve got online membership service Dollar Shave Club. The startup that found its way into guys’ hearts, or at least their bathrooms, when it launched in March of this year has attracted an almost jaw-dropping $9.8 million in venture capital funding from Venrock. Let that sink in a bit – $9.8 million for men’s razors.

The Venice, California-based company’s gimmick is selling quality no-name razors for much less than the cost of a Gillette or Schick, but with high-end customer service and packaging. When Michael Dubin founded the company in 2011, he wanted to help men have fun with shopping online, because, “Women have all the fun [shopping online] with fashion, shoes, and accessories,” he says.

Originally founded in April 2011, Dollar Shave Club raised $1 million from Kleiner Perkins Caufield & Byers, Forerunner Ventures, Andreessen Horowitz, Shasta Ventures, Felicis Ventures, White Star Capital, and others when the company publicly launched in March 2012. The new money brings its funding total to $10.8 million.

With all that cash, Dollar Shave Club has already launched its service into Canada, and Dubin says other international markets with bearded men are next. Clearly, though, Dubin has more than whiskers on his mind.

All he will say for now is that the company has big plans to improve men’s online shopping experiences in the coming weeks, but won’t divulge any details. One likely way it could do that is to branch out into other parts of your average guy’s medicine cabinet, going into shaving cream, facial wash, moisturizer, and pomade, all the manly grooming essentials.

For those still buying blades the old-fashioned way, the Dollar Shave Club usually comes as something of a revelation. Starting at $1 per month plus shipping, you get one razor handle to start and five cartridges of two-blade razors with an aloe vera moisturizing strip (the company doesn’t want you to forget that), shipped to you. For the more discerning gentleman, there’s the $6-per-month 4X model, that comes with four four-blade razor cartridges and The Executive, a six-bladed “personal assistant for your face” for $9 monthly. The prices are so low because Dollar Shave Club gets non-name brand razors from a manufacturer for very low costs.

Sure, you can use Amazon’s Subscribe and Save to deliver your favorite Gillette Mach 3’s every three months, or order generic razors from online retailers like Dorco, but with Dollar Shave Club, you’re paying for the experience as much as the razors. Cartridges and handles arrive in a recyclable cardboard envelope – no frustrating plastic packaging – with a clever message from the company. The company prides itself on creating membership, which Dubin says is warmer than a subscription where a product is carelessly thrown into a box every two months. The startup won’t say how many people have signed up for the service.

Much of the company’s visibility can be attributed to a video Dubin made about the company that riffed on Old Spice’s “The Man” commercials. With more than 7 million views, the video caught the attention of a lot of guys who decided to try out the service, if only to find out how it could possibly sell razors for so cheap.

One of those guys, Corey Mohr, is still ecstatic about Dollar Shave Club five months after signing up. Mohr says he used to buy one package of razors every four to six weeks, ranging from $13 to $20 per purchase. With Dollar Shave Club, he’s spending less than half of that. “It’s awesome, convenient, easy, and inexpensive,” Mohr says to sum up. Remember these are just razors Mohr is crowing about. You can only imagine the joy bursting from guys like him if the Dollar Shaving Club takes over his entire bathroom.